What Is the Risk of Dealing Through an Agent with an Unknown

question 392

Multiple Choice

What is the risk of dealing through an agent with an unknown principal?

• A) You may not be able to ensure that your firm can avoid suspicion of trading on non-public information or other allegations of bad or illegal trading practice.
• B) You may not be able to net your exposure in an insolvency.
• C) You may not be able to net your exposure for capital adequacy purposes.
• D) All of the above.

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Definitions:

Sales Strategy

A planned approach to selling products or services with the aim of achieving consistent, long-term sales growth.

Excess Demand

Occurs when the quantity demanded of a good or service exceeds the quantity supplied at a given price, often leading to shortages.

Upward Pressure

Describes a situation in financial markets or economies where there is a force or trend leading to an increase in prices or rates.

Demand Curve

A graph representing the relationship between the quantity of a good that consumers are willing and able to purchase and its price.